The following selected transactions were completed during August between Summit Co. and Beartooth Co.: Aug. 1 Summit Co. sold merchandise on account to Beartooth Co., $49,550, terms FOB destination, 2/15, n/eom. The cost of the merchandise sold was $30,000. 2 Summit Co. paid freight of $1,265 for delivery of merchandise sold to Beartooth Co. on August 1. 5 Summit Co. sold merchandise on account to Beartooth Co., $59,560, terms FOB shipping point, n/eom. The cost of the merchandise sold was $43,840. 9 Beartooth Co. paid freight of $2,290 on August 5 purchase from Summit Company. 15 Summit Co. sold merchandise on account to Beartooth Co., $56,100, terms FOB shipping point, 1/10, n/30. Summit paid freight of $1,715, which was added to the invoice. The cost of the merchandise sold was $36,310. 16 Beartooth Co. paid Summit for purchase of August 1. 20 Summit Company paid Beartooth Co. a refund of $1,800 for defective merchandise in the August 1 purchase. Beartooth Co. agreed to keep the merchandise. 25 Beartooth Co. paid Summit on account for purchase of August 15. 31 Summit Company granted a customer allowance (credit memo) to Beartooth Co. for $6,000 (invoiced amount) for merchandise that was returned from the August 1 purchase. The cost of the merchandise returned was $3,200. Journalize the August transactions for (1) Summit Co. and (2) Beartooth Co. Refer to the Chart of Accounts of the appropriate company for exact wording of account titles.
| CHART OF ACCOUNTS |
| Summit Co. |
| General Ledger |
| | ASSETS | | 110 | Cash | | 121 | Accounts Receivable-Beartooth Co. | | 125 | Notes Receivable | | 130 | Merchandise Inventory | | 131 | Estimated Returns Inventory | | 140 | Office Supplies | | 141 | Store Supplies | | 142 | Prepaid Insurance | | 180 | Land | | 192 | Store Equipment | | 193 | Accumulated Depreciation-Store Equipment | | 194 | Office Equipment | | 195 | Accumulated Depreciation-Office Equipment | | | LIABILITIES | | 210 | Accounts Payable | | 216 | Salaries Payable | | 218 | Sales Tax Payable | | 219 | Customers Refunds Payable | | 221 | Notes Payable | | | EQUITY | | 310 | Owner, Capital | | 311 | Owner, Drawing | | 312 | Income Summary | | | | REVENUE | | 410 | Sales | | 610 | Interest Revenue | | | EXPENSES | | 510 | Cost of Merchandise Sold | | 521 | Delivery Expense | | 522 | Advertising Expense | | 524 | Depreciation Expense-Store Equipment | | 525 | Depreciation Expense-Office Equipment | | 526 | Salaries Expense | | 531 | Rent Expense | | 533 | Insurance Expense | | 534 | Store Supplies Expense | | 535 | Office Supplies Expense | | 536 | Credit Card Expense | | 539 | Miscellaneous Expense | | 710 | Interest Expense | |
CHART OF ACCOUNTSBeartooth Co.General Ledger
| | ASSETS |
| 110 | Cash |
| 120 | Accounts Receivable |
| 125 | Notes Receivable |
| 130 | Merchandise Inventory |
| 131 | Estimated Returns Inventory |
| 140 | Office Supplies |
| 141 | Store Supplies |
| 142 | Prepaid Insurance |
| 180 | Land |
| 192 | Store Equipment |
| 193 | Accumulated Depreciation-Store Equipment |
| 194 | Office Equipment |
| 195 | Accumulated Depreciation-Office Equipment |
| | LIABILITIES |
| 211 | Accounts Payable-Summit Co. |
| 216 | Salaries Payable |
| 218 | Sales Tax Payable |
| 219 | Customers Refunds Payable |
| 221 | Notes Payable |
| | EQUITY |
| 310 | Owner, Capital |
| 311 | Owner, Drawing |
| 312 | Income Summary |
| | REVENUE |
| 410 | Sales |
| 610 | Interest Revenue |
| | EXPENSES |
| 510 | Cost of Merchandise Sold |
| 521 | Delivery Expense |
| 522 | Advertising Expense |
| 524 | Depreciation Expense-Store Equipment |
| 525 | Depreciation Expense-Office Equipment |
| 526 | Salaries Expense |
| 531 | Rent Expense |
| 533 | Insurance Expense |
| 534 | Store Supplies Expense |
| 535 | Office Supplies Expense |
| 536 | Credit Card Expense |
| 539 | Miscellaneous Expense |
| 710 | Interest Expense |
